Pension Plan Summary 2015

The Pension Plan of The United Church of Canada

Table of ContentsSection Page

Introduction 3

Employee Eligibility 4

Contributions 5

Earning Pension Credits 8

Purchase of Service 11

Forms of Pension 13

Pension Commencement 21

Termination Options 23

Excess Contributions 26

Survivor Benefits 29

Marital Breakdown 32

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IntroductionThe first Constitution of the Pension Plan of The United Church of Canada (the plan) was adopted bythe Third General Council in Winnipeg, Manitoba, in September 1928. Over the years this documenthas been revised many times and expanded to meet changing legislation. This booklet has beenwritten to provide you with a summary of select plan terms.

The United Church’s pension plan is a multi-employer, career-average, defined benefit plan. Thismeans that ministry personnel and lay employees who move between participating employers of theUnited Church’s plan continue to contribute to and earn benefits in the same pension plan eachyear that they are employed by a participating employer. These benefits are paid as a fixed monthlypension starting at retirement based on each year’s pensionable earnings.

The plan and the investment of its assets comply with the requirements of all applicable legislationand accord with the investment policies of the Pension Board. The plan is administered by thePension Board, as established by the Executive of the General Council. The pension plan is operatedon a day-to-day basis through the Ministry and Employment Unit at the General Council Office andthe third-party administrator. All administrative expenses of the plan are paid out of the plan.

For additional information, contact: The United Church of Canada Benefits Centre

Telephone: 1-855-647-8222E-mail: questions@uccan-benefitscentre.caWeb site: www.uccan-benefitscentre.ca

This summary is intended as a general description of the plan. For detailed information, please refer tothe plan text. Should there be any discrepancy between this booklet and the official pension plantext in effect at the time, the pension plan text will apply.

based on the Restated Pension Plan Text prepared as at January 2013 as amended

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Employee Eligibility

If you are an eligible employee working for a participating employer and

you work an average of 14* or more hours per week, you must join the

plan. Enrolments occur on the first day of a month. There is no waiting

period for ministry personnel. Lay employees are enrolled after

completing three months of employment.

Once you join the plan, you will remain a contributing member even if you

work fewer than 14 hours per week.

*If you are an eligible employee of a participating employer who works less than 14

hours per week, you must join the plan if you meet the earnings and/or hours

threshold specified in applicable pension legislation, which varies from province to

province.

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Contributions to the Pension Plan – Ministry Personnel

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If you are MINISTRY PERSONNEL, your pensionable earnings are currentlybased on 140%* of salary (salary plus 40% of salary for the housingcomponent).

*For MINISTRY PERSONNEL not living in a manse, a new definition ofpensionable earnings, based on 100% of the individual's “integratedsalary,” will be phased in between July 1, 2015, and July 1, 2018.

Ministry Personnel:

Annual salary: $ 36,500

Pensionable earnings (140% x $36,500) = $ 51,100

Annual employer contribution (9.0% x $51,100) = $ 4,599

Annual member contribution (6.0% x $51,100) = $ 3,066

Contributions to the Pension Plan – Lay Employees

If you are a LAY EMPLOYEE, your pensionable earnings do not contain ahousing component. Generally, salary and pensionable earnings are thesame amount.

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Lay Employee:

Annual salary: $ 30,000

Pensionable earnings (100% x $30,000) = $ 30,000

Annual employer contribution (9.0% x $30,000) = $ 2,700

Annual member contribution (6.0% x $30,000) = $ 1,800

Contributions to the Pension Plan

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Contributions to the plan are based on pensionable earnings.Contribution rates may change from time to time.

Since January 1, 2013, the employer contribution rate is 9% of annualpensionable earnings and the member contribution rate is 6% ofpensionable earnings.

Your contributions will be deducted from your salary and be sent to thecustodian of the pension fund each month along with the employercontributions made on your behalf.

Earning Pension Credits

The plan is a career-average defined benefit pension plan. The benefit,or “pension credit,” you accrue is based on your pensionable earningsduring each year that you are contributing and employed by aparticipating employer or in search of a call. See the Contributions to thePension Plan section for the definition of pensionable earnings.

The rate that the pension credit is earned or “accrues” has changed overthe years and is now 1.4% of pensionable earnings. Units of pension creditare cumulative. Each year’s pension credit is added to what has alreadybeen earned, forming the total amount of annual pension at terminationor retirement.

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Earning Pension Credits9

Year Pensionable Earnings Accrual RateAnnual

Pension Credit (Rounded)

1990 $21,000 2.1% $4411991 $21,500 2.1% $4521992 $22,000 2.1% $4621993 $22,500 2.1% $4731994 $23,000 1.7% $3911995 $23,500 1.7% $4001996 $24,000 1.7% $4081997 $24,500 1.7% $4171998 $25,000 1.7% $4251999 $25,500 1.7% $4342000 $26,000 1.7% $4422001 $26,500 1.7% $4512002 $27,000 1.7% $4592003 $27,500 1.7% $4682004 $28,000 1.7% $4762005 $28,500 1.7% $4852006 $29,000 1.7% $4932007 $29,500 1.7% $5022008 $29,750 1.7% $5062009 $30,000 1.7% $5102010 $30,500 1.7% $5192011 $31,000 1.7% $5272012 $31,000 1.7% $5272013 $31,700 1.4% $4442014 $31,850 1.4% $4462015 $32,000 1.4% $448

Total Annual Pension $12,000

Example: Dale joined the plan on January 1, 1990, and will retire on January 1, 2016, at age 65 with 26 years of credited service. Dale’s pension will be $12,000 as calculated in the table below:

The accrual rate was reduced to 1.7% in

1994 to ensure compliance with

legislation

The accrual rate was reduced to 1.4% in 2013 in response to

economic conditions affecting the plan.

Earning Pension Credits while Receiving Long-Term Disability Benefits

If you become disabled and qualify for long-term disability benefits fromthe group insurance plan, you will continue to earn pension credits for aslong as your long-term disability benefits are approved.

The pensionable earnings at the date of disability are used for thecalculation of the pension credit and may be increased by up to 3% insubsequent years at the discretion of the Pension Board.

You will not be required to make member contributions while you arereceiving long-term disability benefits under the group insurance plan.

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Purchase of Service

Purchase of Service Prior to the Date of Plan MembershipIf you had an eligible period of service with a participating employer priorto the date you joined the plan, you may be able to purchase past-service pension credits. This service could be pre-ordination/commissioning employment, a probationary period, or contract service.Eligible service does not include service during which you previouslyparticipated in the plan and for which you received a refund from thepension plan (either in cash or by transfer to another registered plan).Depending on the circumstances, the purchases may be paid for by you,by you and your employer or by your employer. Any portion paid by youis generally deductible for income tax purposes. Purchases of post-1989periods of service reduce RRSP contribution room.

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Purchase of Service

Purchase of Unpaid Employment LeaveYou may also purchase pension credit for certain approved periods ofemployment leave. These include approved leaves of absence,maternity/parental/adoption leaves, periods while in search of a call/appointment and study leaves. Plan membership must be establishedprior to the leave.

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Forms of Pension

At retirement, plan members choose from five forms of pension.

All options provide a monthly payment for your life and come with aminimum guaranteed number of months of payout.

Exception for Small Pensions: Your pension can be paid out in a singlelump sum (subject to withholding tax) instead of in monthly installments ifthe amount of the pension or its lump sum value falls below a prescribedamount. This amount varies from province to province.

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Forms of Pension

*The plan generally defines a qualifying spouse as a legally married spouse or a common-law partner who hascohabited with the member in a conjugal relationship for a specified period of time. The exact definition of “spouse”depends on your province of residence.

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Form of Pension Number of Guaranteed Payments Spousal Survivor Pension

Option 1Joint and 66 2/3% spousal pension with 5-yearguarantee

This is the normal payment form if you have aqualifying spouse* at retirement.

60(5 Years)

Yes.Continues at 66 2/3% for spouse’slifetime.

For more details, see page 16.

Option 2Joint and 66 2/3% spousal pension with 10-yearguarantee

The pension payable under this option is less thanunder Option 1 to reflect the longer guaranteeperiod.

120(10 years) Yes.

Continues at 66 2/3% for spouse’slifetime.

For more details, see page 17.

Option 3Joint and 100% spousal pension with 5-yearguarantee

The pension payable under this option is less thanunder Option 1 to reflect the higher spousal survivorpension payable after your death.

60(5 Years)

Yes.Continues at 100% for spouse’slifetime.

For more details, see page 18.

Forms of Pension

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*The plan generally defines a qualifying spouse as a legally married spouse or a common-law partner who has cohabited withthe member in a conjugal relationship for a specified period of time. The exact definition of “spouse” depends on your provinceof residence.

Form of Pension Number of Guaranteed Payments Spousal Survivor Pension

Option 4Lifetime pension with a 15-year guarantee payout

This is the normal payment form if you donot have a spouse* at retirement.

180(15 years)

No.

If you have a spouse, youcannot choose this form ofpension unless your spousewaives their right to a spousalpension in the prescribed form.

For more details, see page 19.

Option 5**Life pension integrated with Old Age Security (OAS)

The amount of pension between earlyretirement and age 65 includes an amountthat is equal to the OAS benefit. Thisoptional form of pension, in effect, prepaysthe estimated amount of the OAS benefituntil you actually begin to receive OAS atage 65. The plan recovers this payout byactuarially reducing your pension after age65 but the reduction will be no more than50%.

**Not available after December 31, 2015

60 (5 years)

Yes.Continues at 66 2/3% forspouse’s lifetime.

For more details, see page 20.

Let’s continue with the example of Dale.Dale's pension is $12,000 per year, or $1,000 per month. The examples below illustrate the pension that Dale and Dale's spouse, Chris, would receive under each option and in certain circumstances.

Option 1 –Joint and 66 2/3% spousal pension with 5-year guarantee• Since this is the normal form,* the pension amount will remain at $1,000

and is payable to Dale for life, no matter how long Dale lives.• If Dale dies before receiving 60 monthly payments and is survived by

Chris, Chris will receive $1,000 per month until the 60 guaranteedpayments are exhausted, and $667 per month after that for life (66 2/3%of $1,000).

• If Dale dies after receiving 60 monthly payments and is survived by Chris,Chris will receive $667 per month for life.

• If both Dale and Chris die before 60 monthly payments have been made,the value of the remaining guaranteed payments will be paid in a lumpsum to Dale's designated beneficiary or, absent a living beneficiary, toDale's estate.

• On the second death, if 60 monthly payments have already been made,nothing further is payable.

*Note: This is the form of pension payable to members who have an eligiblespouse on their retirement date unless another option is chosen (the “normalform”).

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Option 2 –Joint and 66 2/3% spousal pension with 10-year guarantee• Since this form of payment offers a longer guarantee period than Option 1, the

pension amount will be slightly reduced. The exact amount will depend onseveral factors, including Dale’s and Chris’s ages.

• The difference between Option 1 and Option 2 is the length of the guaranteeperiod.

• If Dale dies before receiving 120 monthly payments and is survived by Chris,Chris will receive the amount Dale had been receiving per month until the 120guaranteed payments are exhausted, and 66 2/3% of that amount per monthafter that for life.

• If Dale dies after receiving 120 monthly payments and is survived by Chris, Chriswill receive 66 2/3% of the amount Dale had been receiving per month for life.

• If both Dale and Chris die before 120 monthly payments have been made, thevalue of the remaining guaranteed payments will be paid in a lump sum toDale's designated beneficiary or, absent a living beneficiary, to Dale's estate.

• On the second death, if 120 monthly payments have already been made,nothing further is payable.

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Option 3 –Joint and 100% spousal pension with 5-year guarantee• Option 3 is similar to Option 1 except that, if Chris survives Dale, Chris will

receive 100% of Dale’s pension rather than 66 2/3%.• Since this form of pension provides Chris a higher amount of survivor

pension, the amount payable to Dale is lower. The exact amount ofDale’s initial pension and Chris’s survivor pension will depend on severalfactors, including their ages.

• If Chris survives Dale, Chris will receive the same amount that Dale hadbeen receiving for life.

• If both Dale and Chris die before 60 monthly payments have beenmade, the value of the remaining guaranteed payments will be paid ina lump sum to Dale’s designated beneficiary or, absent a livingbeneficiary, to Dale’s estate.

• On the second death, if 60 monthly payments have already beenmade, nothing further is payable.

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Option 4 – Lifetime pension with a 15-year guarantee payout

• Since this is the normal form for a plan member without an eligiblespouse at retirement, the pension amount will remain at $1,000 and ispayable to Dale for life, no matter how long Dale lives but it does notprovide a spousal pension for Chris.

• Dale can choose this option only if Chris signs a waiver in prescribedform, giving up the right to a spousal survivor pension from the plan.Before giving up this right, Chris should get independent advice froma financial planner who has pension knowledge.

• If Dale dies before receiving 180 monthly payments the value of theremaining guaranteed payments will be paid in a lump sum to Dale’sdesignated beneficiary or, absent a living beneficiary, to Dale’sestate.

• If Dale dies after receiving 180 monthly pension payments, nothingfurther is payable.

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If you have a spouse, you cannot choose this option unless your spouse waives their right to a

survivor pension in prescribed form.

Option 5 – Life pension integrated with Old Age Security

• This option only applies on early retirement.• This form is based on Option 1, but is modified to pay a higher amount

before age 65 and a lower amount after age 65.• The spousal pension and guarantee period work the same as they do

under Option 1.• This form of payment will not be available after December 31, 2015.

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Pension Commencement

Retirement When you are ready to retire, you should contact The United Church

Benefits Centre at 1-855-647-8222, by email at questions@uccan-benefitscentre.ca, or by visiting www.uccan-benefitscentre.ca. Theywill calculate your monthly pension under each available option andsend you the forms you’ll need to fill out. Your pension will commenceafter you return all the completed forms and documents to the BenefitsCentre. Please contact the Benefits Centre 3 months before the dateyou want payments to start.

Your pension will be deposited directly into your Canadian bankaccount on the first day of each month. If you live outside Canada,cheques will be mailed to you.

To be considered “Retired from the United Church,” you must bereceiving a monthly pension benefit paid directly from the UnitedChurch’s pension fund. As a retired member, you may be eligible to jointhe pensioner health and dental plans, as long as you remain eligible forprovincial health coverage.

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Pension CommencementTiming of Retirement When Impact on Pension Amount

Normal Retirement

The first of the month following your 65thbirthday.

No change to your earned pension

Early Retirement

Any time after age 55 and before normal retirement or unreduced early retirement.

Reduced to reflect anticipated longer payout periodPension is reduced by 4% per year for each year by which your early retirement date precedes your normal retirement date (or your unreduced early retirement date, if earlier).

Unreduced Early Retirement

Attainment of age 60 and 35 years ofcredited service.*

OR Attainment of 40 years of credited service(regardless of age) if a member joined theplan prior to 1988.

*If you terminate service after age 55 butbefore age 60, with 35 years of creditedservice, you will become eligible for anunreduced pension on the first of the monthfollowing the date you reach age 60.

No change to your earned pension

Postponed Pension

After age 65 but no later than the first ofDecember in the year you reach age 71.

Pension is increased in 2 ways1) Additional pension credits are earned.2) For each month retirement is postponed beyond age 65, the pension earned to age 65 is actuarially increased to reflect the anticipated shorter payout period.

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Termination OptionsMulti-employer PlanBecause the United Church plan is a multi-employer pension plan, movingbetween pastoral charges and other participating employers will not affectyour plan membership.

You will continue to contribute to and earn benefits in the same pension planeach year that you work for a participating employer.

If your employment ends and you have no immediate plan to return to theUnited Church as an employee, you will become eligible for TerminationOptions under the plan, which are described below.

Vesting and Locking-in The plan grants immediate vesting and locking-in of benefits. Vesting givesyou the right to a pension. Locking-in prevents the value of your pension frombeing “cashed out” and ensures the pension will be intact to pay a benefit atretirement.

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Termination Options

When Employment Ends before Age 55If your employment ends before age 55, you can choose one of thefollowing options: leave your earned pension in the plan and begin to receive it from

age 65 or at any time after age 55 on a reduced basis, transfer the value of the pension to another employer’s pension plan

(if that plan accepts transfers), or transfer the value of the benefit to an approved retirement savings

plan.

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Termination Options

When Employment Ends after Age 55 but before Age 65If you are 55 or more when your employment ends, you will not have theoption to transfer your earned pension* out of the plan.

You can begin your pension immediately (with an early retirementreduction, if applicable) or wait until you turn age 65 or become eligiblefor an unreduced early pension when you reach “60 and 35.”

*Only your excess contributions, if any, will be available in cash (see “Excess Contributions” onthe next page).

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Remember “60 and 35”If you terminate service with 35 or more years of credited service, but before age 60, you will be eligible for an unreduced pension on the first of the month following the date you reach age 60.

Excess Contributions

When your benefit becomes payable (i.e., when you terminate service,retire, or die before retirement), a calculation is performed to see whetherthe sum of your contributions with interest is higher than 50% of the valueof your pension credit. If it is, the amount above 50% is called “excesscontributions.”

If you terminate service or die before retirement, your excesscontributions may bea) used to purchase a higher pension from the plan, if you are

leaving your earned pension in the plan,b) transferred, along with the lump sum value of the pension, out of

the plan to another retirement savings vehicle, orc) refunded to you in cash (subject to withholding tax).

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Excess Contributions

When your benefit becomes payable (i.e., when you terminate service,retire, or die before retirement), a calculation is performed to seewhether the value of your contributions with interest is higher than 50% ofthe value of your pension credit. If it is, the amount above 50% is called“excess contributions.”

Example of Excess Contribution Calculation

Your contributions with interest: $4,600Value of pension at termination: $8,00050% of pension value $4,000

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Contributions + Interest minus 50% of Value equals Excess Contributions

$4,600 - $4,000 = $600

Excess Contributions

In the case of retirement, your excess contributions may bea) used to purchase a higher pension from the plan, orb) refunded to you in cash (subject to withholding tax) or transferred

on a tax-free basis to an RRSP in your name.

In the case of retirement, your excess contributions may bea) used to purchase a higher pension from the plan, orb) refunded to you in cash (subject to withholding tax) or transferred

on a tax-free basis to an RRSP in your name.

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Survivor Benefits – Death Before RetirementSpousal Benefits If you have a qualifying spouse (see page 14 for definition of “spouse”) and you die beforestarting your pension, your surviving spouse will receive a death benefit equal to the greaterof

o the value of your earned pension on the date of your death, or

o the value of the spouse’s survivor pension (generally 2/3 of your earned pension atdeath) plus any children’s pension payable under the plan,

plus

o any excess contributions (see page 27) with interest on the date of your death.

Your surviving spouse may elect too receive the benefit in monthly installments for life (see “Exception for Small Pensions” on

page 13), or

o take the benefit in a lump sum as taxable income where permitted under applicablepension legislation, or

o transfer the lump sum benefit (tax sheltered) into a retirement savings vehicle or toanother employer’s pension plan, if that plan accepts transfers.

Beneficiary BenefitsIf no pre-retirement death benefit is payable to an qualifying spouse, your designatedbeneficiary or, absent a living beneficiary, your estate will receive a taxable refund of thevalue of the pension.

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Survivor Benefits - Death after Retirement

Spousal Benefits – Post-Retirement DeathIf you have an qualifying spouse and you die after your pension begins,your surviving spouse will receive the survivor benefit according to theform of pension you chose at retirement (for examples, see pages 14 and15).

Beneficiary BenefitsAny death benefit payable to your designated beneficiary or estate willbe paid as a lump sum.

See “Forms of Pension” section for more information.

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Survivor Benefits – Dependent Children’s Pension

Each dependent child will receive a monthly child’s pension subject toa maximum.

This applies whether the parent dies before or after retirement.

A dependent child is a natural or adopted child who is under the ageof 18, or over 18 but under 25 if still in school.

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Marital BreakdownPension assets are family property and can be divided between spouses onmarital breakdown, although this is not mandatory in most jurisdictions.

The value of the pension credit you accrue during the spousal relationship isgenerally included in your assets for the purpose of equalizing family propertyon marital breakdown. In some jurisdictions, this value is calculated by thepension plan administrator on application by one of the former spouses andpayment of the applicable fee. In other jurisdictions, the spouses arrange theirown calculation(s).

If a family property equalization payment is owing from the member spouse tothe non-member spouse, the member is not required to split his/her pension tosatisfy that payment if other assets are transferred to the non-member spouse.Similarly, spousal support/maintenance can but is not required to be satisfiedthrough a pension split.

A court order or separation agreement must specifically require a split of thepension. The pension plan administrator will administer each split within theparameters of the order/agreement subject to the requirements of applicablepension legislation.

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